The High Court rules on the farce of Right to Rent rules
Hard to manage, difficult to police, and unfair on landlords and agents. Basically, this was our analysis of the Right to Rent scheme when the government introduced it. The scheme passes all responsibility for checking immigration status onto landlords and agents, and if they get it wrong, there is a lot of aggro dumped on them. This may all come to an end soon, thanks to a recent ruling by the High Court.
What is Right to Rent?
The Right to Rent rules stipulates that it is the landlord’s responsibility to vet the immigration status of prospective tenants. If you rent to someone who doesn’t have the legal right to rent in the UK, then you could be fined up to £3,000 – per occupant. That’s £12,000 for a family of four. It’s a tough scheme to administer, and a 2016 RLA survey found that 90% of landlords had not received any information about it and what they had to do.
It was introduced by Theresa May when she was Home Secretary, part of a package of policies designed to get tough with illegal immigrants.
(Read more in our article “Avoid buy-to-let landlord fines by knowing Right to Rent rules”.)
Does the Right to Rent scheme break anti-discrimination laws?
Like so much of recent legislation, the Right to Rent scheme has good intentions but fails because of the lack of attention to other areas it may affect.
For example, the Tenant Fees Bill seeks to remove the one-off payment that agents levy on tenants to cover certain costs such as admin, vetting, and drawing up new tenancy agreements. Without these (not unsubstantial) fees paid for, the obvious recourse is for agents to charge landlords. In turn, the landlords will simply increase the rent. The tenant ends up being the loser, paying extra rent every month ad infinitum.
In the case of the Right to Rent scheme, the High Court has found that the scheme breaches human rights by leading to discrimination against non-UK nationals. Research carried out by the Resident Landlords Association, which showed that the policy leads to private landlords discriminating against applicants without a British passport, was presented to the High Court. A substantial 44% of landlords told the researchers that they would not rent to someone without a UK passport.
The government also knows that Right to Rent leads to discrimination
With the aplomb of a scene from a Laurel and Hardy movie, the government released research during the court case that also showed a significant proportion of landlords were not willing to rent to tenants without a British passport. Honestly, you couldn’t make it up!
Unsurprisingly, with so much evidence stacked against them – including their own (more chortling!) – the government lost the case. The Justice hearing it found that the scheme breaches the European Convention on Human Rights because it leads to discrimination against non-UK nationals who do have the right to rent in the UK, and against British ethnic minorities.
The judge said that the Right to Rent scheme, “does not merely provide the occasion or opportunity for private landlords to discriminate, but causes them to do so where otherwise they would not”. We couldn’t agree more, and we have always felt that this could be a consequence of the design of the scheme and the penalties imposed under it.
Logical and predictable – something this government doesn’t do
The judge described the way in which the scheme forces discrimination as being “logical and wholly predictable” because of the penalties foisted if the landlord gets it wrong. Landlords are mostly cautious investors. Erring on the side of caution, a landlord would rather not rent to someone who may be illegal rather than take the chance of being fined thousands of pounds for an honest mistake.
In addition, the judge ruled that the safeguards provided by the government to avoid discrimination simply didn’t work effectively. It provides a ream of online advice, telephone advice, and codes of conduct and codes of practice. A whole rainforest of paperwork – but to no avail. The judge called this “ineffective,” and said that “the government cannot wash its hands of responsibility for the discrimination which is taking place, by asserting that such discrimination is carried out by landlords acting contrary to the intention of the scheme.”
A welcome victory for landlords
In an environment in which the government has seemingly done its damnedest to handicap private landlords, this is a welcome victory. Hopefully, the government will withdraw the scheme or, at the very least, make it workable; quite how, we’re not sure. We believe that it is right for the government to take illegal immigration seriously. What we have never considered being appropriate is forcing landlords and agents to act as unpaid, untrained, conscripted border guards.
The RLA and Joint Council for the Welfare of Immigrants (JCWI) have requested a meeting with the Home Secretary to discuss the High Court ruling. It is our understanding that they will seek that the Right to Rent scheme is scrapped. It is our hope that they are successful.
For effortless property management from a manager that supports both landlords and tenants, and to keep up with all the landlord news, contact one of our team today at +44 0 1522 503 717.
Live with passion,
Brett Alegre-Wood